Even Mighty Isis Can’t Hurry Pay-With-Your-Phone Future

The iPhone was introduced in 2007. In the five years since, the smartphone has leap-frogged into the leading ranks of the world’s labor-saving devices. That’s not hyperbole: Market research firm IHS iSuppli predicts that for the first time, a majority of cellphones shipped worldwide next year will be smartphones.

But you wouldn’t know that smartphones have matured as a technology platform from the scattershot state of mobile payments, especially in the United States. Witness Isis, a joint “mobile wallet” venture undertaken by Verizon Wireless, AT&T and T-Mobile, and later joined by the country’s four leading credit card companies. That would seem to be the definitive roster needed to make mobile payments a widespread reality.

Yet more than a year after MasterCard, Visa, American Express, and Discover climbed on board, Bloomberg reports that only next month will Isis finally roll out its long-awaited pilot program. If you happen to live in Salt Lake City or Austin and happen to have an NFC-equipped phone (all 50 or so of you), you can use that phone to pay at stores that have terminals that can read the tiny chips. (Isis said this spring that participating retailers will include Foot Locker, Macy’s, Jamba Juice, and others, as well as Coca-Cola vending machines.)

Isis’ experiment could well prove successful, but clearly these are very early days still. This isn’t to single out Isis: Despite everyone taking a shot, no mobile payment platform has caught fire. You can use your phone to Twitter, text message, e-mail, the web, and various apps. But for the most part, you can’t use it to pay at the checkout counter.

The slow pace of mobile payments highlights a conundrum that mostly existed in the margins before smartphones. Computing problems used to be mostly self-contained: How do you get the software to do what it needs to do within the circumscribed world of the computer sitting on my desk? But when smartphones allow that computing power to go out into the world, the engineering problems radiate out beyond the device. The technological problem of using the phone at the checkout counter has already been solved multiple ways: NFC, QR codes, apps. It’s the problem of the social and economic engineering required to persuade the countless stakeholders in the current system to overhaul their infrastructure that proponents of mobile payments have yet to solve. Until consumers are persuaded that paying with their phones is something they actually want, merchants won’t feel compelled to make mobile payments an option. Outside of a few high-profile experiments, your choices for the near future will remain paper or plastic.